When financial institutions (FIs) discuss the impact of scams, they typically focus on reimbursement costs. In the U.S., financial institutions are only required to reimburse unauthorized payments, including those resulting from scams. However, they are responsible for covering authorized Zelle scams, but not all authorized scam-related payments. Fraud teams also highlight the operational costs associated with scam investigations, which are often longer and more complex than traditional account takeover fraud cases. However, many FIs overlook two major financial drains: customer attrition and deposit losses.
The Growing Burden of Reimbursement Costs
Reimbursement costs are the most immediate and visible financial impact of scams. In the U.S., financial institutions are often responsible for covering losses tied to authorized push payment (APP) fraud. However, global trends indicate that the burden on banks is increasing:
- United Kingdom: In 2024, new legislation came into effect requiring banks to reimburse victims of APP fraud, significantly increasing financial liability.
- Australia: As of February 2025, a shared responsibility model between banks, social media, and tech companies has been introduced, reflecting the growing expectation that financial institutions play a central role in scam prevention and mitigation.
These regulatory changes, coupled with rising scam volumes, mean reimbursement costs are mounting—and banks need proactive strategies to mitigate them.
The Operational Cost of Scam Investigations
Scam cases are far more resource-intensive than traditional fraud investigations. Unlike account takeover fraud, which is often resolved through automated detection and swift action, scam-related incidents require:
- Lengthy customer interactions and investigations.
- Coordination with law enforcement and other financial institutions.
- Complex fraud analysis to track scammer activity across multiple accounts and channels.
As scam cases increase, fraud teams are under immense pressure, driving up operational costs and straining existing resources.
The Hidden Cost of Customer Attrition
Customer attrition due to scams comes in two forms:
- Lost Trust, Lost Customers: When scam victims feel unsupported by their bank, they often leave. This is not just a reputational issue; it directly impacts Customer Lifetime Value (CLTV). A single negative experience can drive away a long-term, high-value customer.
- "Three Strikes, You're Out": Many FIs quietly close the accounts of customers who fall victim to scams multiple times. This disproportionately affects the most vulnerable customers—often young individuals who are future high-net-worth clients but may not yet understand financial fraud tactics like money muling.
Research by Javelin and the Global Anti-Scam Alliance (GASA) shows that most scam victims are under 55, with only 17% being older than 55. Ignoring younger scam victims today could mean losing high-value customers in the future.
The Massive Impact of Deposit Losses
The biggest financial drain is deposit losses. When a scammer steals money from a customer, the bank loses its ability to generate interest on that deposit. With banks making roughly 3% interest on customer deposits over an average of five years, this loss adds up fast.
Let’s put this into perspective:
- A recent Gallup survey found that 8% of Americans reported losing money to scams in 2023 alone.
- A 2025 PYMNTS Intelligence report suggests hat over 30% of Americans, roughly 77 million individuals — have lost money to a scam in the past five years. The victims lost an average of $545 with nearly three in ten (27%) losing between $1,000 and $9,999 and more than one in ten (12%) suffering over $10,000 in losses.
- Multiply 8% of your customer base by the average scam amount, and calculate the 3% deposit interest, over five years.
The numbers are staggering.
The Call to Action
Scams are not just a fraud issue; they are a long-term financial threat to banks. It’s time to step up and do more to protect customers—not just to reduce fraud losses, but to safeguard future revenue, customer relationships, and deposits.
How can your institution proactively protect customers? Learn how RangersAI empowers customers against online scams and helps financial institutions minimize losses while building trust. Let’s talk about solutions before these hidden costs spiral out of control. Contact us: info@scamranger.ai
